Investment bank Rodman & Renshaw has filed a request with the Financial Industry Regulatory Authority to withdraw from the brokerage business.
The New York firm filed a Form BDW – the Uniform Request for Withdrawal of Broker Dealer – with FINRA on September 14, 2012, according to a notice filed with the Securities and Exchange Commission.
Two days earlier, the subsidiary of Direct Markets Holdings informed FINRA that it was no longer in compliance with the SEC’s Net Capital Rule 15c3-1, and as a result would cease conducting its securities business, other than liquidating transactions.
On August 23, Rodman & Renshaw was cited by FINRA for crossing “information barriers” between its research and investment banking operation. The brokerage was fined $315,000.
Five days later, Kevin Lupowitz resigned from the company board of directors and in September did not assume the chief executive role of the parent company, which had been previously announced. Edward Rubin is currently CEO.
The parent company said it still will attempt to commercialize its Direct Markets electronics platform.
Rodman & Renshaw Capital Group changed its name to Direct Markets Holding Corp. on June 1. The Direct Markets platform was launched in February.
Coincident with the name change, the firm decided the Direct Markets venue for connecting stock issuers with investors should be open to all investment banks.
Originally, Rodman & Renshaw was to be the only investment bank to effect securities transactions on it.
Direct Markets also is developing additional "financial technology applications" that it will market.
In the FINRA case, Rodman’s former chief compliance officer, William A. Iommi Sr., was fined $15,000, suspended from acting in a principal capacity for 90 days and must requalify as a general securities principal, FINRA said. Two research analysts also were sanctioned.
The independent regulator of brokers said that the firm failed to properly supervise interactions between researchers and investment banking staff.
In at least two cases, FINRA said, a research analyst participated in efforts to solicit investment banking business.
In a separate incident, a research analyst attempted to arrange a payment from a public company, the regulator said.